Obj. 1 The condensed product-line income statement for Rhinebeck Company for the month of October is as follows: Details Fixed costs are 20% of the cost of goods sold and 30% of the selling and administrative expenses. Rhinebeck Company assumes that fixed costs would not be materially affected if the Gloves line were discontinued. a. Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternative 1) or discontinued (Alternative 2). Fixed costs are 20% of the cost of goods sold and 30% of the selling and administrative expenses. Rhinebeck Company assumes that fixed costs would not be materially affected if the Gloves line were discontinued. a. Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternative 1), or discontinued (Alternative 2). Answer: Check Figure: Alternative 2 loss, $(12,900) b. Should the Mufflers line be retained? Explain. a. b. The Mufflers line should be retained since profit would decrease by If the Mutflers line is discontinued